Beginner's Guide to Opening a Specialty Café in India

Mariam Erin Pinza October 2024

Photo Courtesy : Indian Coffee House

India isn't just about producing coffee anymore—it's also making severe movements towards the specialty coffee scene. You can really feel this shift with the rise of local roasteries, Specialty cafés, and more informed consumers.

Coffee has always been a big part of Southern Indian culture, but by the early 2000s, coffee shops started popping up everywhere, making it trendy, especially among young people. Café Coffee Day, The Coffee Bean, and Barista played a huge role in shaping India's modern coffee culture. Today, brands like Starbucks, Blue Tokai, Thirdwave Coffee, and Sabko are elevating the coffee scene with unique flavors and experiences. The Indian coffee market is booming, with an estimated value of USD 9,240 million in 2023, and it’s expected to grow at a CAGR of 11.99% reaching a value of USD 20,410 Million by 2030. Coffee in India has become more than just a drink—it's a shared experience that connects farmers, roasters, baristas, and coffee lovers.

The coffee business in India is growing, but so is the competition. To keep-up as a specialty coffee shop owner in India, you need to mix your commitment to the coffee industry and community with an intelligent business strategy. If you're still wondering when and how to open a café in India, today can be definitely the right time. And here's the step-by-step Guide to help you how to navigate a successful path of opening your dream Specialty Coffee Shop :

Critical steps in Starting up a Specialty Coffee shop in India

Develop a Well-Researched Business plan. When starting your own coffee shop, your values and vision form the foundation of your business. It defines your brand, the experience you want to create, and what sets you apart from other coffee shops in India or your city. Along with your vision, a well-researched business plan will serve as your compass, guiding each decision you make by :

Managing startup finances and operational strategies
Understanding your location and target market to develop an attractive Menu
Deciding which Café business type, whether it's a cozy community spot, a slow-brew-bar haven with rare coffee selections, or a grab-and-go place.
Studying the flow of a thriving café to keep up with the latest trends
Hiring the right people and choosing the essential coffee equipment for effective workflow

1. Choose the Right Location and Know your Target-Market

The right location is a make-or-break decision for your coffee shop. A great location can significantly boost your chances of success. Consider factors like;

Photo Courtesy : Javaphile

Know Your Audience: Research the local demographics to understand who your customers will be and tailor your shop accordingly.

Foot Traffic Matters: A steady flow of pedestrians can make or break your business, so pick a spot where people naturally pass by.

Ease of Access: Make sure your shop is easy to reach, whether by foot, car, or bike.

Be Seen: Your coffee shop should be highly visible from the street to attract new customers.

Check the Competition: Look at nearby cafes and see if there's enough demand for another coffee spot in the area.

Zoning & Permits: Don’t forget to check local zoning laws and secure any necessary permits.

Pick the Right Spot: Locations near schools, offices, shopping areas, or tourist spots tend to draw more traffic.

2. Identify Startup Costs and Equipment

Once you've chosen a location and see potential for growth, it's important to consider the startup costs. These include rent and renovation based on your shop's design, operational expenses like staff salaries, electricity, and ingredients, fees for business permits and legal paperwork, marketing and advertising costs, and investing in high-quality coffee and brewing equipment.

Sourcing a Reputable Coffee from a local Roastery in India — aside from choosing the best-tasting specialty, purchasing a coffee goes beyond a partnership with transparency and traceability. You can't sell products you do not know, so understanding what you are getting is necessary. Make sure that your supplier provides quality control support and all the relevant details, such as ;

Photo Courtesy : Araku Coffee

Roast date to know the freshness of the coffee
Farmer's or Producer's information for traceability
Coffee Information: Varitety, Origin, Process, tasting notes
Roast-level details

Sourcing Coffee Equipment and Right Supplier —High-quality equipment is essential for crafting great coffee and ensuring long-term efficiency and reliability. Investing wisely upfront can save you money in the long run and prevent you from ending up with disposable equipment that needs constant replacement, such as :

Coffee Grinder
Espresso Machine
Water Filtration System
Manual Brew equipment
Fridge and freezers

It's also wise to partner with reputable suppliers who offer good value and reliable after-sales service.

Photo Courtesy : Subko coffee

3.Creating Necessary permits and licenses

Licensing is crucial when opening a café in India. It ensures compliance with health standards and gives your business a distinct legal identity. This includes health permits, food safety certifications, and business registrations such as :

FSSAI License
Shop and Establishment Act License
GST Registration
Trade License
Fire Safety Certificate
Insurance

4. Menu Engineering

Your menu should reflect your brand and appeal to your target market. It’s more than just a list of items; it's your personality. Balance familiar favorites like coffee, tea, and pastries with seasonal signature drinks that set you apart. Whether you offer a simple, high-quality selection or a unique, ever-changing menu, partner with suppliers who value quality as much as you do.

Photo Courtesy : Araku Coffee

5. Designing and setting up your café

With the fast phasing growth of specialty café in India, one aspect that will make you different is your originality and style. Putting yourself in your customer's shoes and thinking about what would make their experience enjoyable is vital to creating a welcoming environment.

Café design influences customer experience and aligns ambiance with brand vision.
Choose a design bar style that suits the operational workflow to enhance customer service, whether a place to relax over coffee or for people in a rush for a grab-and-go consumer.
Focus on creating a welcoming environment by thinking from the customer's perspective.
Setting right and customer focus team is one of the most important action items. This also includes appropriate training & follow up program for team.

6. Marketing and Promotion

In today's digital age, marketing goes beyond traditional advertising—it's about building a community. "Out of sight, out of mind" holds, so creating a strong online and offline presence is vital to staying top-of-mind for your customers.

Leverage social media to share your story, showcase your menu, and engage with your audience.
Host events, collaborate with coffee influencers in India, and encourage customers to share their experiences.
Visual content, like photos of your drinks and behind-the-scenes clips, can be particularly effective.

Competitive Landscape: Indian Coffee Start-ups

Company	Revenue 2020	Product Categories
Blue Tokai	$ 5.6 Mn	Roasted and Ground Coffee, Cold Brew Bags, Starter Kits, Coffee Mugs, Brewing Equipment
Sleepy Owl Coffee	$ 0.7 Mn	Cold Brew, Hot Brew, Filter Coffee, RTD Coffee, Latte, Merchandise
Rage Coffee	$ 0.2 Mn	Instant Coffee, Cold Brew Bags, Flavored Coffee
Slay Coffee	$ 0.3 Mn	Coffee Ground and Beans, Coffee Pour Over, Coffee Concentrate, DIY Coffee Brewing Kit
The Flying Squirrel	$ 0.2 Mn	Coffee Ground and Beans, Cold Brew, Brewing Equipment and Accessories

Date Source from: STELLAR

Conclusion

Opening a specialty coffee shop in India right now means you're joining a massive wave actively shaping the coffee industry, with a growing emphasis on understanding specialty coffee quality and appreciating the people behind it. However, challenges are inevitable, and the return on investment (ROI) might not be as quick as expected. But with the proper planning and intelligent execution, you can set yourself up for success with your first café.

To thrive as a coffee shop owner, combine your love for coffee with a solid business plan. Stay passionate, get creative, and keep learning. Ultimately, owning a coffee shop can be rewarding and profitable.

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